Pre-Market Analysis: Banknifty Future – 5th Jan 2022

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Abbreviations I use in the post: PDH: Previous day’s high, PDL: Previous day’s low, IB: Initial Balance or First 1 hour range, NVD: Normal variation day (one of the market profile day types), OTD: open test drive, POC: Point of control, HVN (High volume node)

Observation from previous day:

After a good up move on Monday, prices on Tuesday opened near PDH and there was a struggle between initiative buyers and responsive sellers at PDH and buyers were able to keep prices above PDH for most of the day resulting in sideways movement throughout the day. BNF formed a Non trend day which indicates that even though value area shifted up and price is in control of bulls, there was a poor trade facilitation which could signal Bulls exhaustion.

What can be expected now:

We need to see if responsive sellers can take advantage of bulls exhaustion and can push prices down or protect the highs today or not. In case they are not, I am expecting prices to move further up but with less momentum. In case Buyers are able to follow through upside above PDH, buyers will be in control and can push prices further up. In case they are not able to accept above PDH or in case of rejection above PDH, the struggle will continue and might result in sideways to down move.

PDH (37020), POC (36850) and PDL (36485) are the levels to look out for from previous day’s range. Acceptance above PDH can test virgin high (37280) and acceptance below PDL can test weak low 35650.

Trade plan for today:

Prices are expected to open inside previous day’s range and we need to see if buyers can push the prices above PDH or not. In case of clear acceptance above PDH, I will look for a long trade but in case of false break or any acceptance inside range, I will wait for IB formation and plan accordingly but will be cautious on long trades. Short trade only after a very clear indication that strong sellers have entered.

Some cautions:

  1. No long trades below PDL.
  2. No short trades above PDH.


Please note that this is a personal view for learning , observational and education purpose and is not a trading recommendation. Trading futures carry a risk, so you should consult a financial expert before taking any risk. Also, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.

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